7.

NIETES v CA
FACTS: Nietes leased from Dr. Garcia the Angeles Educational Institute; the
contract contained an Option to Buy the land and school buildings within the
period of the lease. It also stipulated that the unused payment will be applied
to the purchase price of the school. Nietes paid Garcia certain sums in excess
of the rent, which Garcia acknowledged as forming partial payment of the
purchase price of the property. Later on, Garcia, through counsel, wrote Nietes
informing him of his decision to rescind the contract due to certain violations
of the contractsuch as poor maintenance, lack of inventory of school
equipment, and the use of another name for the said school. Nietes replied by
informing Garcia that he decided to exercise his Option to Buy, but Garcia
refused to sell. Nietes thereafter deposited the balance of the price to AgroIndustrial Bank, but he later withdrew the said amounts. CA ruled in favor of
Garcia stating that the full purchase price must be paid before the Option to
Buy may be exercised. Thus, Nietes brought the matter to the SC.
ISSUE: W/N actual payment is needed before one may exercise the option to
buy
HELD: NO. There is nothing in the contract that required Nietes to pay the full
price before he could exercise the option. It was sufficient that he informed
Garcia of his choice and that he was at that time ready to pay. The exercise of
the option need not be coupled with actual payment so long as such payment is
made upon the fulfillment of the owners undertaking to deliver the property.
This is based on the principle that such option contracts involve reciprocal
obligationsand one does not incur delay if the other party fails or refuses to
comply with his respective obligation. That being the case, there was no need
for Nietes to deposit the said amountsand his withdrawal thereof does not
affect his right.
CARCELLER v CA
FACTS: Carceller leased 2 parcels of land owned by State Investment Houses
(SIHI), the period being 18 months at P10,000/month rent. Under the lease,
SIHI guaranteed Carceller the exclusive right and option to purchase the said
lots within the lease period for the aggregate amount of P1.8M. Around 3 weeks
before the end of the lease period, SIHI informed Carceller of the impending
termination of the lease and the short period left for him to purchase. He
begged for an extension, but SIHI refused. Nevertheless, SIHI offered the
property to him for lease for another year, but this time, it also offered it for
sale to the public. Carceller thus sued SIHI for specific performance to compel
SIHI to execute a Deed of Sale in his favor.
ISSUE: W/N Carceller may still exercise the option to purchase the property
HELD: YES. Even if Carceller failed to purchase the property within the said

period, still equity must intervene. He had introduced substantial

improvements thereon; to rule against him would cause damage to himand
SIHI does not stand to gain much therefrom. SIHI clearly intended to sell the lot
to him considering that it was under financial distress, that is constantly
reminded him of the option and the impending deadline. The delay of 18 days
is not substantial. Carcellers letter to SIHI expressing his intent to purchase
the lot is fair notice of intent to exercise the option despite the request for
extension. Carceller should thus be allowed to buy the lots.

8. ANG YU ASUNCION v CA
FACTS: The Unijeng spouses owned certain residential and commercial spaces
leased by Ang Yu. They offered to sell the said units to Ang Yu on several
occasions and for P6M. Ang Yu made a counter offer for P5M. The Unijeng
spouses asked Ang Yu to specify his terms in writing but the latter failed to do
so. They failed to arrive at any definite agreement. When Ang Yu discovered
that the spouses were planning to sell the property to others, he sued them for
specific performance. While the case was pending, the spouses sold the units to
Buen Realty for P15M.
ISSUE: W/N there was a perfected contract of sale between Unijeng and Ang Yu
HELD: NO. There was no perfected contract of sale yet since there was yet any
meeting of the minds. Thus, there is no ground for specific performance.
During the negotiation stage, any party may withdraw the offer made
especially if it was not supported by any consideration.
An Option Contract of a Right of First Refusal is separate and distinct from the
actual contract of sale which is the basis for specific performance. The
remedy available to Any Yu, in case the withdrawal was made capriciously and
arbitrarily, would be to sue on the basis of abuse of right. In case there was an
option contract, timely acceptance would create an obligation to sell on the
part of the vendor; but no such circumstance attends in this case.
EQUATORIAL REALTY DEV. INC. v MAYFAIR THEATER INC.
FACTS: For its theaters, Mayfair was leasing a portion of the property in CM
Recto, which Carmelo owns. Under the lease agreement, if Carmelo should
decide to sell the leased premises, Mayfair shall be given 30 days exclusive
option to purchase the same. Carmelo, through Henry Yang, informed the
president of Mayfair that the former is interested in selling the whole CM Recto
propertyand that Araneta offered to purchase the same for $1.2M. Mayfair
twice replied through a letter of its intention to exercise its right to repurchase
but Carmelo never replied. Thereafter , Carmelo sold the entire property to
Equatorial Realty for some P11M. Thus, Mayfair instituted an action for specific

performance and annulment of the sale. Carmelo alleges that the right, being
an option contract, is void for lack of consideration.
ISSUE: W/N the right to repurchase is an option contract and void for lack of
consideration
HELD: NO. The clause in the lease agreement was NOT an option contract, but
a RIGHT OF FIRST REFUSAL. It was premised on Carmelos decision to sell the
said property. It also did not contain a stipulation as to the price of said
property. The requirement of separate consideration does not apply to a right
of 1st refusal because consideration is already an integral part of the lease.
Carmelo violated such right by not affording Mayfair a fair chance to negotiate.
It abandoned the negotiations arbitrarily.
Equatorial was likewise in bad faith; it was well aware of the right conferred
upon Mayfair because its lawyers had ample time to review the contract. That
being the case, the contract between Carmelo and Equatorial is rescissible.
Mayfair should be allowed to purchase the entire property for the price offered
by Equatorial. Rights of First Refusal are also governed by the law on contracts,
not the amorphous principles on human relations.

PARANAQUE KINGS ENTERPRISES INC v CA

FACTS: Catalina owned 8 parcels of land leased to Chua, who assigned its rights
thereto to Lee Ching Bing, who, in turn, assigned said rights to Paranaque King
Enterprises, which introduced significant improvements on the premises. Under
the lease agreement, in case of sale, the lessee shall have the option or
priority to buy the said properties. Catalina, in violation of the said
stipulation, sold the lot to Raymundo for P5M. Paranaque King notified her of
the said breach, and she immediately had the lots reconveyed. She then
offered the lot to Paranaque King for P15M; but the latter refused claiming that
the offer was ridiculous. Catalina thereafter sold it again to Raymundo for
P9M.
ISSUE: W/N there was compliance with the Right of First Refusal assigned to
Paranaque King
HELD: NO. In a Right of First Refusal, the seller cannot offer the property to
another for a lower price or under terms more favorable. It must be offered
under the same terms & conditions to Paranaque King; otherwise, the right of
first refusal becomes illusory. Only if Paranaque King fails to meet the offer
may the property be offered for sale to another buyerand under the same
terms and conditions as well. The Right of First Refusal may also be validly
transferred or assignedas in this case.

INSERT VASQUEZ v. AYALA

FACTS: In 1984, Ayala Corp. entered into a Memorandum of Agreement with Dr.
Vasquez buying the latters shares with Conduit Developmentwhich constitute
some 50 hectares of the land in Ayala Alabang. Under the MOA, Ayala was to
undertake the development of the lands except the retained area. Under Par.
5.15 of the MOA, Ayala agreed to give Vasquez a first option to purchase the 4
adjacent lots to the retained area at the prevailing market price at the time of
the purchase. A case was filed by one of the former sub-contractors of Conduit
against Ayala causing a 6-year delay in the development of the project. Now,
Vasquez comes forward invoking Par. 5.15 claiming that it was a valid option
contract, and that Ayala should sell to him the said property at the 1984
prevailing price. Ayala offered to sell the said properties to Vasquez at the
prevailing prices (1990); but the latter refused to accept. Ayala discounted the
price from P6,500/sqm to P5,000/sqm, but still, Vasquez refused.
ISSUE: W/N there was a valid option contract given to Vasquez
HELD: NO. Par. 5.15 was NOT an option contract, but a RIGHT OF FIRST
REFUSAL. It was predicated upon Ayalas decision to sell the said properties.
The price was also not specified. It was also not supported by any independent
consideration. By twice refusing to accept Ayalas offers, Vasquez lost his right
to repurchase. Ayala did not breach its obligation.

RIVERA FILIPINA INC v CA

FACTS: In 1982, Reyes executed a 10-year (renewable) Contract of Lease with
Riivera Filipina over a parcel of land in EDSA. Under such contract, the lessee is
given a right of first refusal should the lessor decide to sell the property during
the terms of the lease.
Such property was subject of a mortgage executed by Reyes in favor of
Prudential Bank. Since Reyes failed to pay the loan with the bank, it foreclosed
the mortgage and it emerged as the highest bidder in the auction sale.
Realizing that he could not redeem the property, Reyes decided to sell it and
offered it to Riviera Filipina for P5,000/sqm. However , it bargained for
P3,500/sqm. Reyes rejected such offer. After 7 months, it again bargained for
P4,000/sqm, which again was rejected by Reyes who asked for P6,000/sqm
price. After 2 months, it again bargained for P5,000/sqm, but since Reyes
insisted on P6,000/sqm price, he rejected Riviera's offer .
Nearing the expiry of the redemption period, Reyes and Traballo (his friend)
agreed that the latter would buy the same for P5,300. But such deal was not

yet formally concluded and negotiations with Riviera Filipina once again
transpired but to no avail.
In 1989, Cypress and Cornhill Trading were able to come up with the amount
sufficient to cover the redemption money, with which Reyes paid to Prudential
Bank to redeem the property. Subsequently, a Deed of Absolute Sale was
executed in favor of Cypress and Cornhill for P5.4M. Cypress and Cornhill
mortgaged the property in favor of Urban Dev. Bank for P3M.
Riviera Filipina filed a suit against Reyes, Cypress and Cornhill on the ground
that they violated its right of first refusal under the lease contract. RTC ruled
in favor of Reyes, Cypress, and Cornhill. On appeal, CA affirmed the decision of
the RTC.
ISSUE: W/N Riviera Filipina lost its right of first refusal
HELD: YES. As clearly shown by the records and transcripts of the case, the
actions of the parties to the contract of lease, Reyes and Riviera, shaped their
understanding and interpretation of the lease provision "right of first refusal" to
mean simply that should the lessor Reyes decide to sell the leased property
during the term of the lease, such sale should first be offered to the lessee
Riviera. And that is what exactly ensued between Reyes and Riviera, a series of
negotiations on the price per square meter of the subject property with neither
party, especially Riviera, unwilling to budge from his offer, as evidenced by the
exchange of letters between the two contenders.
It can clearly be discerned from Rivieras letters that Riviera was so intractable
in its position and took obvious advantage of the knowledge of the time
element in its negotiations with Reyes as the redemption period of the subject
foreclosed property drew near. Riviera strongly exhibited a "take-it or leave- it"
attitude in its negotiations with Reyes. It quoted its "fixed and final" price as
Five Thousand Pesos (P5,000.00) and not any peso more. It voiced out that it
had other properties to consider so Reyes should decide and make known its
decision "within fifteen days." Riviera even downgraded its offer when Reyes
offered anew the property to it, such that whatever amount Reyes initially
receives from Riviera would absolutely be insufficient to pay off the
redemption price of the subject property. Naturally, Reyes had to disagree with
Rivieras highly disadvantageous offer.
Nary a howl of protest or shout of defiance spewed forth from Rivieras lips, as
it were, but a seemingly whimper of acceptance when the counsel of Reyes
strongly expressed in a letter dated December 5, 1989 that Riviera had lost its
right of first refusal. Riviera cannot now be heard that had it been informed of
the offer of Five Thousand Three Hundred Pesos (P5,300.00) of Cypress and
Cornhill it would have matched said price. Its stubborn approach in its
negotiations with Reyes showed crystal-clear that there was never any need to
disclose such information and doing so would be just a futile effort on the part

of Reyes. Reyes was under no obligation to disclose the same. Pursuant to

Article 1339 of the New Civil Code, silence or concealment, by itself, does not
constitute fraud, unless there is a special duty to disclose certain facts, or
unless according to good faith and the usages of commerce the communication
should be made. The general rule is applicable in the case at bar since Riviera
failed to convincingly show that either of the exceptions are relevant to the
case at bar.

MACION v GUIANI
FACTS: Macion and Dela Vida Institute entered into a contract to sell, where
the latter assured the former that it will buy the 2 parcels of land in Cotabato
City on or before July 31, 1991 at P1.75M. In the meantime Dela Vida took
possession of it and promptly built an edifice worth P800,000. However, on the
said date, the sale did not materialize. Consequently, Macion filed a complaint
for unlawful detainer against Dela Vida, while Dela Vida countered with a
complaint for reformation of the contract to sell. These differences were
eventually settled.
In 1992, both parties entered into a compromise agreement where Macion will
give Dela Vida 5 months to raise P2.06M and in case of failure to do so, Dela
Vida would vacate the premises. After 2 months, Dela Vida alleged that they
had negotiated a loan from BPI and requested Macion to execute the contract
to sell in its favor . However , Macion refused, which prompted Dela Vida to
file an urgent motion for an order to direct Macion to execute the contract to
sell. In return, Macion filed a motion for execution of judgment alleging that
after 5 months, Dela Vida was not able to settle their obligations with Macion.
RTC ruled in favor of Dela Vida.
ISSUE: W/N it was proper to execute a contract to sell in favor of Dela Vida
HELD: YES. Although the compromise agreement (par. 7) does NOT give Dela
Vida the right to demand from Macion the execution of the contract to sell in
its favor. From this paragraph, it is clear that Macion is obliged to execute a
Deed of Sale and not a Contract to Sell upon payment of the full price of
P2.06M. Thereafter, Macion will turn over to Dela Vida the TCT.
HOWEVER, a review of the facts reveals that even prior to the signing of the
compromise agreement, both parties had entered into a contract to sell, which
was superseded by a compromise agreement. This compromise agreement must
be interpreted as bestowing upon Dela Vida the power to demand a contract to
sell from Macion. Where Macion promised to execute a deed of absolute sale
upon completing payment of the price, it is a contract to sell. In the case at

bar, the sale is still in the executory stage since the passing of title is subject
to a suspensive condition--that if Dela Vida is able to secure the needed funds
to purchase the properties from Macion. A mere executory sale, one where the
sellers merely promise to transfer the property at some future date, or where
some conditions have to be fulfilled before the contract is converted from an
executory to an executed one, does not pass ownership over the real estate
being sold. It cannot be denied that the compromise agreement, having been
signed by both parties, is tantamount to a bilateral promise to buy and sell a
certain thing for a price certain. Hence, this gives the contracting parties rights
in personam, such that each has the right to demand from the other the
fulfillment of their respective undertakings. Demandability may be exercised at
any time after the execution of the Deed.
MANILA METAL CONTAINER CORP. v PNB
FACTS: Manila Metal was the owner of a parcel of land in Mnadaluyong. To
secure a P900K loan it obtained from PNB, Manila Metal executed a real estate
mortgage over the lot. PNB later granted Manila Metal a new credit
accommodation of P1M. Manila Metal secured another loan of P653K from PNB.
In 1982, PNB sought to have the property foreclosed and sold at a public
auction. PNB was the highest bidder. Manila Metal requested an extension of
time to redeem the property and to repurchase such on installment.
The Special Assets Management Department (SAMD) prepared a statement of
account and as of 1984, Manila Metal's obligation amounted to P1.6M, which
includes the bid price, interests, advances of insurance premiums, advances on
realty taxes, etc. When apprised of the statement of account, Manila Metal
remitted P725K to PNB as deposit to repurchase.
In the meantime, SAMD recommended that Manila Metal be allowed to
repurchase for P1.6M. PNB, however, rejected the recommendation and offered
the property at P2.66M, its minimum market value. Manila Metal refused and
reiterated that it already acceded to SAMD's offer, to which it remitted P725K.
In 1985, PNB accepted the offer but for P1.9M cashless the P725K deposit.
Manila Metal, again, rejected this offer and filed a complaint against PNB for
the annulment of foreclosure or specific performance, contending that there
was a valid contract of sale between Manila Metal and SAMD.
In 1993, while the case was pending, Manila Metal offered to repurchase at
P3.5M, but PNB rejected because the market value of the property was at
P30M. Manila Metal offered again at P4.25M but was rejected again.

VILLONCO v BORMAHECO

FACTS: Cervantes and his wife owned 3 parcels of land along Buendia where he
buildings of Bormaheco Inc were situated. Beside their property were lots
owned by Villonco Realty. Cervantes entered into several negotiations with
Villonco for sale of the Buendia property. Cervantes made a written offer of
P400/sqm with a downpayment of P100,000 to serve as earnest money. The
offer also made the consummation of the sale dependent upon the acquisition
by Bormaheco of a Sta. Ana property. Villonco made a counter-offer stating
that the earnest money was to earn 10% interest p.a. The check was enclosed
with the reply letter. Cervantes accepted and cashed the check. The Sta. Ana
Property was awarded to Bormaheco; the transfer was also duly approved.
However, Cervantes sent the check back to Villonco with the interest thereon
stating that he was no longer interested in selling the property. He also claims
that no contract was perfected; Villonco sues for specific performance.
ISSUE: W/N there was a perfected contract of sale
HELD: YES. There was a perfected contract of sale. The alleged changes made
in the counter-offer are immaterial and are mere clarifications. The changes of
the words Sta. Ana property to another property as well as the insertion of
the number 12 in the date, and the words per annum in the interest are
trivial. There is no incompatibility in the offer and counter- offer. Cervantes
assented to the interest and he, in fact, paid the same. Also, earnest money
constitutes prood of the perfection of the contract of sale and forms part of
the consideration. The condition regarding the acquisition of the Sta. Ana
property was likewise fulfilled; there is thus no ground for the refusal of
Cervantes to consummate the sale.
FIRST OPTIMA REALTY CORPORATION, Petitioner, vs. SECURITRON
SECURITY SERVICES, INC., Respondent. G.R. No. 199648
January 28, 2015
SECOND DIVISION
DEL CASTILLO, J.:
Earnest money
Facts:
The petitioner looking to expand business and add to its existing
offices, respondent through its General Manager, Antonio Eleazar
(Eleazar) sent a letter to the petitoner offering to purchase the subject
property at P6,000.00 per square meter. A series of telephone calls
ensued, but only between Eleazar and Youngs secretary; Eleazar
likewise personally negotiated with a certain Maria Remoso (Remoso),
who was an employee of petitioner. At this point, Eleazar was unable to
personally negotiate with Young or the petitioners board of directors.
Sometime thereafter, Eleazar personally went to petitioners office
offering to pay for the subject property in cash, which he already
brought with him. However, Young declined to accept payment, saying
that she still needed to secure her sisters advice on the matter. 10She

likewise informed Eleazar that prior approval of petitioners Board of

Directors was required for the transaction, to which remark Eleazar
replied that respondent shall instead await such approval.11
On February 4, 2005, respondent sent a Letter of even date to
petitioner. It was accompanied by Philippine National Bank Check No.
24677, issued for P100,000.00 and made payable to petitioner. The
check was received by the clerk and as a standard procedure, it was
eventually deposited with and credited to petitioners bank account
Thereafter, respondent through counsel demanded in writing that
petitioner proceed with the sale of the property
Issue: Whether there is a contract of sale when the respondent
accepted the supposed earnest money.
Held No.
In the present case, the parties never got past the negotiation stage.
Nothing shows that the parties had agreed on any final arrangement
containing the essential elements of a contract of sale, namely, (1)
consent or the meeting of the minds of the parties; (2) object or
subject matter of the contract; and (3) price or consideration of the
sale.
Respondents subsequent sending of the February 4, 2005 letter and
check to petitioner without awaiting the approval of petitioners
board of directors and Youngs decision, or without making a new offer
constitutes a mere reiteration of its original offer which was already
rejected previously; thus, petitioner was under no obligation to reply to
the February 4, 2005 letter. It would be absurd to require a party to
reject the very same offer each and every time it is made; otherwise, a
perfected contract of sale could simply arise from the failure to reject
the same offer made for the hundredth time. Thus, said letter cannot
be considered as evidence of a perfected sale, which does not exist in
the first place; no binding obligation on the part of the petitioner to sell
its property arose as a consequence. The letter made no new offer
replacing the first which was rejected.
OESMER v PARAISO DEV CORP.
FACTS: Oesmers are co-owners of undivided shares of 2 parcels of agricultural
and tenanted land in Cavite, which are unregistered and originally owned by
their parents. When their parents died, they acquired the lots as heirs by right
of succession.
In 1989, Paular, a resident and former Mun. Sec. of Carmona Cavite, brought
Ernesto Oesmer (one of the heirs) to meet with Lee, President of Paraiso
Development Corp, in Manila for the purpose of brokering the sale of Ernesto's
properties to Paraiso Dev. Corp. A contract to sell was entered into between
Paraiso Dev. Corp and Ernesto as well as Enriqueta. A check in the amount of

P100,000 payable to Ernesto was given as option money. Eventually, Rizalino,

Leonora, Bibiano Jr, and Librado also signed the Contract to Sell. However, 2 of
their brothers, Adolfo and Jesus, refused to sign the document.
A couple of months after, the Oesmers informed Paraiso (through a letter) that
it is rescinding the Contract to Sell and returning the option money. However,
Paraiso did not respond and thus, Oesmers filed a complaint for declaration of
nullity of the Contract to Sell with the RTC, which ruled in favor of Paraiso Dev.
Corp. On appeal, CA modified by declaring that the Contract to Sell is valid and
binding as to the undivided shares of the six signatories of the document.
ISSUE: W/N the Contract to Sell is valid as to all signatories
HELD: NO. It is true that the signatures of the 5 siblings did not confer
authority on Ernesto as agent to sell their respective shares in the properties,
because such authority to sell an immovable is required to be in writing.
However, those signatures signify their act of directly (not through an agent)
selling their personal shares to Paraiso Dev. Corp.
In the case at bar, the Contract to Sell was perfected when the petitioners
consented to the sale to the respondent of their shares in the subject parcels
of land by affixing their signatures on the said contract. Such signatures show
their acceptance of what has been stipulated in the Contract to Sell and such
acceptance was made known to respondent corporation when the duplicate
copy of the Contract to Sell was returned to the latter bearing petitioners
signatures.
As to petitioner Enriquetas claim that she merely signed as a witness to the
said contract, the contract itself does not say so. There was no single
indication in the said contract that she signed the same merely as a witness.
The fact that her signature appears on the right-hand margin of the Contract to
Sell is insignificant. The contract indisputably referred to the Heirs of Bibiano
and Encarnacion Oesmer, and since there is no showing that Enriqueta signed
the document in some other capacity, it can be safely assumed that she did so
as one of the parties to the sale.
In the instant case, the consideration of P100,000.00 paid by respondent to
petitioners was referred to as option money. However, a careful
examination of the words used in the contract indicates that the money is
not option money but earnestmoney. Earnest money and option money
are not the same but distinguished thus: (a) earnest money is part of the
purchase price, while option money is the money given as a distinct
consideration for an option contract; (b) earnest money is given only where
there is already a sale, while option money applies to a sale not yet
perfected; and, (c) when earnest money is given, the buyer is bound to pay
the balance, while when the would-be buyer gives option money, he is not
required to buy, but may even forfeit it depending on the terms of the

option.

DAILON v CA
FACTS: Sabesaje sues to recover ownership of a parcel of land based on a
private document of absolute sale executed by Dailon. Dailon denies the fact of
the sale alleging that the same being embodied in a private instrument, the
same cannot convey title under Art. 1358 of the Civil Code which requires that
contracts which have for their object the creation, transmission, modification,
or extinction of real rights over immovable property must appear in a public
instrument.
ISSUE: W/N there was a valid/perfected contract of sale
HELD: YES. The necessity of a public instrument is only for conveniencenot for
validity and enforceability. Such is not a requirement for the validity of a
contract of sale, which is perfected by mere consent. Dailon should thus be
compelled to execute the corresponding deed of conveyance in a public
instrument in favor of Sabesaje. If the sale is made through a public
instrument, it amounts to constructive delivery.

SECUYA v VDA DE SELMA

FACTS: Caballero owned certain friar lands. She entered into an Agreement of
Partition where she parted with 1/3 of the said property in favor of Sabellona.
Sabellona took possession thereof and sold a portion to Dalmacio Secuya
through a private instrument that is already lost. Secuya, along with his many
relatives took possession of the said land. Later on, Selma bought a portion of
the said land, including that occupied by Secuya; she bought it from Caesaria
Caballero. She presented a Deed of Absolute Sale and a TCT. Secuya filed a
case for quieting of title. CA upheld Selmas title considering that she had a
TCT and a Deed of Sale.
ISSUE: Who has a better right, Secuya or Selma?
HELD: The Secuyas have nothing to support their supposed ownership over the
parcel of land. The best evidence they could have had was the private
instrument indicating the sale to their predecessor-in- interest. But the
instrument is lost. Even so, it is only binding as between the parties and cannot

prejudice 3rd persons since it is not embodied in the public document. Selma,
on the other hand, has all the supporting documents necessary; she also acted
in good faith and thought that the Secuyas were merely tenants. They did not
even pay realty taxes and did not have their claim annotated to the certificate
of sale.
YUVIENGCO v DACUYCUY
FACTS: Yuvienco entered into a contract with Yao King Ong and the other
occupants, wherein the former will sell to the latter the Sotto property in
Tacloban City for P6.5M provided that the latter made known their decision to
buy it or not later than July 31, 1978. When Yuvienco's representative went to
Cebu with a prepared and duly signed contract for the purpose of perfecting
and consummating the transaction, Yao King Ong and other occupants found
variance between the terms of payment stipulated in the document and what
they had in mind. Thus, it was returned unsigned. Thus, the action for specific
performance.
ISSUE: W/N the claim for specific performance of Yao King Ong is enforceable
under the Statute of Frauds
HELD: YES. It is nowhere alleged in the complaint that there is any writing or
memorandum, much less a duly signed agreement to the effect, that the price
of P6,500,000 fixed by petitioners for the real property herein involved was
agreed to be paid not in cash but in installments as alleged by Yao King Ong.
The only documented indication of the non-wholly-cash payment extant in the
record is the deeds already signed by Yuvienco and taken to Tacloban by Atty.
Gamboa for the signatures of the respondents. In other words, the 90- day term
for the balance of P4.5 M insisted upon by respondents choices not appear in
any note, writing or memorandum signed by either the petitioners or any of
them, not even by Atty. Gamboa. Hence, looking at the pose of respondents
that there was a perfected agreement of purchase and sale between them and
petitioners under which they would pay in installments of P2 M down and P4.5
M within ninety 90) days afterwards it is evident that such oral contract
involving the "sale of real property" comes squarely under the Statute of Frauds
(Article 1403, No. 2(e), Civil Code.)
In any sale of real property on installments, the Statute of Frauds read
together with the perfection requirements of Article 1475 of the Civil Code
must be understood and applied in the sense that the idea of payment on
installments must be in the requisite of a note or memorandum therein
contemplated. While such note or memorandum need not be in one single
document or writing and it can be in just sufficiently implicit tenor,
imperatively the separate notes must, when put together', contain all the
requisites of a perfected contract of sale. T o put it the other way , under the
Statute of Frauds, the contents of the note or memorandum, whether in one

writing or in separate ones merely indicative for an adequate understanding of

all the essential elements of the entire agreement, may be said to be the
contract itself, except as to the form.

ORTEGA v LEONARDO
FACTS: Ortega occupied a parcel of land. After the liberation, the government
assigned the lot to the Rural Progress Admin. She asserted her right thereto;
but was disputed by Leonardo. Ortega and Leonardo agreed to a compromise.
The agreement was for Ortega to desist from pressing her claim, and Leonardo,
upon getting the lot, would sell to her a portion thereof provided she paid for
the surveying of the lot. If he acquired title, she could stay as tenant. Ortega
thus desisted from her claim, paid for the surveying of the lot and the
preparation of the plan, and regularly paid him a monthly rental. When she
remodeled her sons house beside the lot, it extended over the subject lot.
When Leonardo acquired title, he refused to sell the portion agreed upon. He
claims that the contract is unenforceable based on the Statute of Frauds.
ISSUE: W/N the contract is unenforceable
HELD: NO. The contract is enforceable because there was partial performance.
Ortega made substantial improvements on the lot, desisted from her claim,
continued possession, and paid for the surveying, and also paid the rentals. All
these put together amount to partial performance, which takes the verbal
agreement out of the operation of the Statute of Frauds.

CLAUDEL v CA
FACTS: Cecilio Claudel acquired a lot from the Bureau of Lands. He occupied
the same, declared it in his name and dutifully paid his taxes. After his death,
his heirs and siblings contested each other claiming ownership thereof. It was
his heirs who were in possession of the property. They partitioned it amongst
themselves, registered each portion under the Torrens System, and each paid
their respective taxes. The siblings filed a case for cancellation of titles and
reconveyance arguing that there was a verbal sale between Cecilio and their
parents over the lot. As evidence, they presented a subdivision plan. CA
ordered the cancellation of the TCT s in favor of the heirs.
ISSUE: W/N there was a valid sale between Cecilio and his parents

HELD: NO. As a rule, a sale of land is valid regardless of the form it may have
been entered into. However, in the event that a 3rd party disputes the
ownership, there is no such proof in support of the ownership. As such, it
cannot prejudice 3rd personssuch as the heirs in this case. Also, the heirs had
a right to rely upon their Torrens titles, which, as opposed to the subdivision
plans, are definitely more credible.
ALFREDO v BORRAS
FACTS: Godofredo & Carmen mortgaged their land to DBP for P7,000. To pay
their debt, they sold the land to Armando & Adelia for P15,000. Armando &
Adelia also assumed to pay the loan. Carmen issued Armando & Adelia a receipt
for the sale. They also delivered to Armando & Adelia the Original Certificate of
Title, tax declarations, and tax receipts. They also introduced Armando &
Adelia to the Natanawans, the tenants of the said property as the new lessors.
They thereafter took possession of the said land. Later, they found out that
Godofredo & Carmen sold the land again to other buyers by securing duplicate
copies of the OCTs upon petition with the court. Thus, they filed for specific
performance. Godofredo & Carmen claimed that the sale, not being in writing,
is unenforceable under the Statute of Frauds.
ISSUE: W/N the contract of sale is unenforceable under the Statute of Frauds.
HELD: NO. The Statute of Frauds is applicable only to executory contracts, not
those that have already been partially or completely consummated. In this
case, the sale of the land to Armando & Adelia had already been consummated.
The ownership of the land was also transferred to Armando & Adelia when they
were introduced to the Natanawans and took possession thereof. Therefore,
when Godofredo & Carmen sold the land to other buyers, it was no longer
theirs to sell. Further, the subsequent buyers were in bad faith because
Armando & Adelia registered their adverse claimthis amounts to constructive
notice, which negates good faith.
The Statute of Frauds likewise does not apply considering that Godofredo &
Carmen had already derived the benefits from the salesuch as the money to
pay for the loan. The receipt also suffices to constitute the memorandum
required by the Statute of Frauds. Assuming that the sale was voidable because
it was conjugal property, the same was ratified by Godofredo by introducing
Armando & Adelia to the Natanawans as the new lessors. Also, even though
titled as Specific Performance, the complaint was one for reconveyance and
prescription does not lie of one who is in actual possession of the property.

TOYOTA SHAW INC v CA

FACTS: Luna Sosa wanted to buy a Toyota Lite Ace. He went to Toyota Shaw
where he met Popong Bernardo, a sales rep. Sosa explained that he needed the
Lite Ace by June 17, otherwise, he would become a laughing stock. Bernardo
guaranteed that the vehicle would be delivered. They executed a document
entitled Agreements between Sosa & Popong Bernardo of Toyota Shaw where a
P100K downpayment was stipulated and that the Lite Ace would be available at
a given date. When the day of reckoning arrived, the Lite Ace was unavailable
the explanation of Bernardo being nasulot ng ibang malakas. However ,
according to T oyota, the true reason was that BA Finance, which
answer for the balance of the purchase price, did not approve Sosas
application. Toyota also returned the downpayment. Thus, Sosa sued for
damages amounting to P1.2M due to his humiliation, hurt feelings, sleepless
nights, and so on.
ISSUE: W/N there was a perfected contract of sale
HELD: NO. Toyota Shaw should NOT be held liable for damages because there
was no perfected contract of sale in the first place. There was no agreement as
to the price and the manner of paymentwhich are both essential to the
perfection of the sale. It was also clear that Bernardo signed the document in
his personal capacity and it was up to Sosa to inquire as to the extent of the
formers capacity. Sosa did not even sign it. It was nothing but a mere
proposal, which did not mature into a perfected contract of sale in lieu of the
subsequent events. In fact, it made no specific reference to the sale of a
vehicle. No obligations could thus arise therefrom. Sosa has no one else to
blame but himself for his humiliation for bragging about something he does not
own yet.